OREANDA-NEWS. Fitch Ratings has affirmed 39 classes from 14 Firstmac RMBS transactions and has also affirmed Firstmac Mortgage Funding Trust Series 1E-2007's Class A-1 notes' currency swap obligation. All transactions are backed by pools of conforming Australian residential mortgages sourced directly or by way of third-party introducers. The mortgages were originated in the name of nominee companies on behalf of the trustee, FirstMac Fiduciary Services Pty Ltd, and sold to the various trusts through FirstMac warehouses. A full list of rating actions can be found at the end of this commentary.

KEY RATING DRIVERS
The affirmations reflect Fitch's view that available credit enhancement supports the notes at their current ratings, the agency's expectations of Australia's economic conditions, and that the credit quality and performance of the underlying loans have remained within expectations.

As per the APAC Residential Mortgage criteria, the default model was only run for three transactions; FirstMac Mortgage Funding Trust Series 1-2007, FirstMac Mortgage Funding Trust Series 2-2011 and FirstMac Mortgage Funding Trust Series 1E-2013. The default model was not run for the remaining transactions as a review of pre-determined performance triggers indicates that the transactions display stable asset performance.

In December 2015, FirstMac Mortgage Funding Trust Series 1-2007 had the highest levels of 30+ day arrears at 3%, while Firstmac Mortgage Funding Trust No.4 Series 2-2015 had the lowest levels of 30+ day arrears at 0.1%, compared to Fitch's Dinkum RMBS Index of 0.91%.

The transactions have performed within Fitch's expectations, with minimal levels of losses. All transactions are covered by mortgage insurance, with policies provided by Genworth Financial Mortgage Insurance Pty Ltd (Insurer Financial Strength Rating: A+/Stable), and QBE Lenders' Mortgage Insurance Limited (Insurer Financial Strength Rating: AA-/Stable). Since closing, across the 14 Firstmac transactions rated by Fitch, 143 loans have defaulted, resulting in zero losses across the outstanding Fitch rated notes. Lenders' mortgage insurance (LMI) has covered 85% of the losses, with all losses not paid by LMI, covered by excess spread.

RATING SENSITIVITIES
Sequential pay-down has increased credit enhancement for the senior notes of each transaction, with the 'AAAsf' rated notes able to withstand many multiples of the latest reported arrears.

The ratings are not expected to be affected by any foreseeable change in performance. The ratings of all the Firstmac transactions' Class A notes are independent of downgrades to the LMI provider's ratings.

Class B notes may be downgraded if there is a significant reduction in LMI claims paid and excess spread. Fitch's analysis excludes any credit to excess spread and no charge-offs have been recorded to date on any notes.

DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.

DATA ADEQUACY
Fitch conducted a file review of 10 sample loan files focusing on the underwriting procedures conducted by FirstMac compared to its credit policy at the time of underwriting. Fitch has checked the consistency and plausibility of the information and no material discrepancies were noted that would impact Fitch's rating analysis.

A comparison of the transaction's representations, warranties and enforcement mechanisms (RW&Es) to those of typical RW&Es for this asset class is available by accessing the reports and/or links under Related Research below.

The full list of rating actions is as follows.

FirstMac Bond Series 1E-2006 Trust:
EUR30.7m Class A notes (ISIN XS0250012498) affirmed at 'AAAsf'; Outlook Stable; and
AUD50.5m Class B notes (ISIN AU300FMA9017) affirmed at 'BBsf'; Outlook Stable.

FirstMac Mortgage Funding Trust Series 1-2007:
AUD82.4m Class A notes (ISIN AU0000FMAHA0) affirmed at 'AAAsf'; Outlook Stable;
AUD10.1m Class AB notes (ISIN AU3FN0001889) affirmed at 'AAAsf'; Outlook Stable; and
AUD27.0m Class B notes (ISIN AU3FN0001897) affirmed at 'BBsf'; Outlook Stable.

FirstMac Mortgage Funding Trust Series 1E-2007:
EUR35.1m Class A1 notes (ISIN XS0305486127) affirmed at 'AAAsf'; Outlook Stable;
Class A-1 Currency Swap Obligation affirmed at 'AAAsf'; Outlook Stable;
AUD95.9m Class A2 notes (ISIN AU3FN0003026) affirmed at 'AAAsf'; Outlook Stable; and
AUD10.2m Class B notes (ISIN AU3FN0003018) affirmed at 'BBsf'; Outlook Stable.

FirstMac Mortgage Funding Trust Series 1-2010:
AUD127.1m Class A-3 notes (ISIN AU3FN0011441) affirmed at 'AAAsf'; Outlook Stable; and
AUD18.3m Class AB notes (ISIN AU3FN0011458) affirmed at 'AAAsf'; Outlook Stable.

FirstMac Mortgage Funding Trust Series 2-2011:
AUD48.4m Class A-2 notes (ISIN AU3FN0014775) affirmed at 'AAAsf'; Outlook Stable;
AUD87.7m Class A-3 notes (ISIN AU3FN0014783) affirmed at 'AAAsf'; Outlook Stable; and
AUD10.7m Class AB notes (ISIN AU3FN0014791) affirmed at 'AAAsf'; Outlook Stable.

FirstMac Mortgage Funding Trust Series 1-2012:
AUD112.9m Class A-2 notes (ISIN AU3FN0016135) affirmed at 'AAAsf'; Outlook Stable; and
AUD11.8m Class AB notes (ISIN AU3FN0016143) affirmed at 'AAAsf'; Outlook Stable.

FirstMac Mortgage Funding Trust RMBS Series 3-2012:
AUD112.8m Class A-1 notes (ISIN AU3FN0017570) affirmed at 'AAAsf'; Outlook Stable;
AUD73.0m Class A-2 notes (ISIN AU3CB0203313) affirmed at 'AAAsf'; Outlook Stable; and
AUD16.2m Class AB notes (ISIN AU3FN0017588) affirmed at 'AAAsf'; Outlook Stable.

FirstMac Mortgage Funding Trust Series 1E-2013:
AUD89.3m Class A-1 notes (ISIN AU3FN0019436) affirmed at 'AAAsf'; Outlook Stable;
GBP92.0m Class A-2 notes (ISIN XS0942504639) affirmed at 'AAAsf'; Outlook Stable; and
AUD22.0m Class AB notes (ISIN AU3FN0019279) affirmed at 'AAAsf'; Outlook Stable.

FirstMac Mortgage Funding Trust Series 2E-2013:
AUD64.5m Class A-1 notes (ISIN AU3FN0020939) affirmed at 'AAAsf'; Outlook Stable; and
GBP85.0m Class A-2 notes (ISIN XS0993136174) affirmed at 'AAAsf'; Outlook Stable.

FirstMac Mortgage Funding Trust No.4 Series 1A-2014:
AUD98.6m Class A-1 notes (ISIN AU3FN0023453) affirmed at 'AAAsf'; Outlook Stable;
AUD297.5m Class A-2B(A) (ISIN AU3FN0027843) notes affirmed at 'F1+sf';
AUD0m Class A-2R notes affirmed at 'AAAsf'; Outlook Stable; and
AUD16.5m Class A-3 notes (ISIN AU3FN0023461) affirmed at ' AAAsf '; Outlook Stable.

Firstmac Mortgage Funding Trust No. 4 Series 2-2014:
AUD147.7m Class A-1 notes (ISIN AU3FN0024618) affirmed at 'AAAsf'; Outlook Stable;
AUD250.9m Class A-2 notes (ISIN AU3FN0024626) affirmed at 'AAAsf'; Outlook Stable; and
AUD19.7m Class A-3 notes (ISIN AU3FN0024634) affirmed at 'AAAsf'; Outlook Stable.

Firstmac Mortgage Funding Trust No. 4 Series 3PP-2014:
AUD426.8m Class A-1 notes (ISIN AU3FN0016127) affirmed at 'AAAsf'; Outlook Stable; and
AUD25.1m Class A-2 notes (ISIN AU3FN0016135) affirmed at 'AAAsf'; Outlook Stable.

Firstmac Mortgage Funding Trust No. 4 Series 1-2015:
AUD467.0m Class A-1 notes (ISIN AU3FN0027405) affirmed at 'AAAsf'; Outlook Stable;
AUD232.2m Class A-2 notes (ISIN AU3FN0027413) affirmed at 'AAAsf'; Outlook Stable; and
AUD38.7m Class A-3 notes (ISIN AU3FN0027421) affirmed at 'AAAsf'; Outlook Stable

Firstmac Mortgage Funding Trust No.4 Series 2-2015:
AUD371.6m Class A-1a notes (ISIN AU3FN0029427) affirmed at 'AAAsf'; Outlook Stable;
AUD25.0m Class A-1b notes (ISIN AU3CB0233880) affirmed at 'AAAsf'; Outlook Stable;
AUD0.0m Class A-1R notes affirmed at 'AAAsf'; Outlook Stable; and
AUD23.8m Class A-2 notes (ISIN AU3FN0029435) affirmed at 'AAAsf'; Outlook Stable.